Overstock to Release Blockchain Product to Curb Naked Short Sales

Overstock will soon release software designed to help alleviate the very problem that got its founder involved in blockchain in the first place.

After four years of development, a subsidiary of the U.S. retailer now has a tool to let short-sellers identify and borrow shares they want to trade against, instead of selling shares they might not actually possess. Called a Digital Locate Receipt (DLR), the technology based on the company’s tZERO platform appears to be designed to curb the practices of so-called naked short selling in which investors trade on stocks they promise to borrow, but do not.

The opaque trading practice is widely credited for driving CEO Patrick Bryne to blockchain in the first place…

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